Primo Hoagies
Primo Hoagies offers franchises to operate fast food restaurants serving hoagies, cheesesteaks, salads, and sides under the Primo Hoagies brand. Known for its variety of sandwiches, this franchise is part of the quick-service restaurant industry.
About Primo Hoagies
PrimoHoagies Franchising, Inc., doing business as PrimoHoagies, is a United States East Coast-based, fast casual restaurant chain founded in 1992 in South Philadelphia. Primo Hoagies has over 115 locations in ten states.
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Primo Hoagies franchise FAQ
How much does it cost to open one — the total initial investment?
The total estimated initial investment required to open one PrimoHoagies restaurant ranges from $382,025 to $668,178. This includes an initial franchise fee of $66,099 to $75,000 [p.21].
What is the initial franchise fee?
The initial franchise fee is $20,000 and it covers the franchise license to operate within the specified territory. This fee is deemed fully earned upon payment, is not refundable under any circumstances, and is applied uniformly to all franchisees [p.12].
What are the ongoing royalty and advertising fees?
Ongoing royalties are earned based on a percentage of franchisee gross revenues, as defined in the franchise agreement. These represent sales-based royalties related entirely to the use of the Company's intellectual property and are recognized as franchisee sales occur and the royalty is deemed collectible [p.191, p.162]. Advertising fund fees are also collected from franchisees based on a percentage of their gross revenues for the purpose of advertising and promotional programs [p.191, p.162].
How long is the initial franchise agreement, and can I renew it?
The initial term of the franchise agreement is not specified in the excerpts. However, if the agreement is not a renewal of a previously executed one for the same location, you may have the right to renew the agreement for two additional five-year terms at Franchisor's discretion [p.68].
Can I sell or transfer my franchise, and what does that require?
Yes, you can sell or transfer your franchise, but it requires payment of a transfer fee. The fee is the greater of $12,500 or 5% of the sales price (not to exceed $20,000) [p.15]. Additionally, the franchisor may refuse transfers for good cause, which includes but is not limited to unspecified reasons [p.6].
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the agreement on any grounds available by law [p.233]. However, this may be subject to Illinois law (815 ILCS 705/19) [p.215], which could impose additional requirements for termination.
What financial requirements — net worth and liquid capital — do I need to qualify?
This isn't specified in the excerpts. The FDD does not provide specific details on the net worth or liquid capital required for qualification as a franchisee. However, it does mention that the franchisor considers compliance with certain requirements when determining whether to grant new or additional franchises [p.25].
Do I get an exclusive or protected territory?
No, you do not receive an exclusive territory. You may face competition from other franchisees, outlets owned by the company, or other channels of distribution or competitive brands controlled by them [p.38, p.37]. The territory granted can vary based on demographic characteristics and is typically mutually agreed upon between you and the franchisor [p.10, p.37].
What training and ongoing support does the franchisor provide?
The franchisor provides an initial training program consisting of approximately 150 hours of classroom/in-store training and 37 hours of virtual training [p.34]. This program is mandatory for at least one individual from Franchisee, or a manager approved by the franchisor, to complete before the opening of the PrimoHoagies Restaurant [p.73]. Additionally, if Franchisee is a corporation, partnership, or limited liability company, at least one owner must also complete portions of the Initial Training Program as required by the franchisor [p.73]. The training team includes personnel supervised by Eric Bonner [p.34]. For ongoing support, the pre-opening activities are considered individually distinct and accounted for as a single performance obligation, with revenue recognized when the franchised location opens [p.191].
How many franchised outlets are there, and how many have closed or been terminated?
The FDD indicates that there are 88 franchised locations in total. Out of these, 34 restaurants were either not open for the Measurement Period, terminated, or did not operate on a full-time basis year-round due to being seasonal or non-traditional locations [p.51].
Does the franchisor share any financial performance or earnings information?
The franchisor does not make any financial performance representations other than the one provided based on data from Designated Restaurants. This representation is permissible under the FTC's Franchise Rule, but if you receive any other financial performance information or projections of your future income, you should report it to the franchisor and relevant regulatory agencies as specified [p.52].
What am I restricted to selling, and where must I buy supplies?
You are not allowed to sell hoagies or other deli or specialty sandwiches that constitute ten percent or more of the gross sales at any retail business you own or have an interest in [p.125]. Additionally, you must purchase all food items, ingredients, and other products offered for sale at your Franchised Business from the franchisor or designated suppliers as specified by them [p.22].